Labour dramatically toughened its position on European migration today — only to be overshadowed when Lord Mandelson dismissed an EU referendum as a “lottery”.

In a distinctly harder line, shadow business secretary Chuka Umunna said Ed Miliband may demand a change in theEU treaties to curb the free movement of unemployed people chasing jobs.

“I do not think the founders of the EU envisaged it to be a vehicle for the free movement of job-seekers in a European Union of 28 member states,” he told the Evening Standard. “The free movement of job-seekers is definitely something that needs to be addressed.”

Mr Umunna said he had already talked to potential allies in other EU countries who were open to a renegotiation of rules, if properly handled. While it was right for skilled workers to take jobs anywhere with the EU, he said “high-skilled people coming from other countries to do low-skilled jobs” were a problem.

Thousands of EU citizens from the new member states in eastern Europe have flocked to Britain in search of higher wages, many taking jobs well below their qualifications and experience.

Labour has previously been scornful of David Cameron’s vow to seek treaty changes, including limits on free movement to protect jobs. Polls suggest the public are increasingly angry about losing control of the UK’s borders to the EU and seeing jobs go to 500,000 EU citizens.

In a contrasting tone, however, Lord Mandelson said the public should not be given a vote on whether Britain stays in or leaves the EU because the outcome would be a “lottery”.

The former Labour Deputy Prime Minister said EU membership was too important to be placed “in the hands” of such an unpredictable body as the public.

“Look, my view is that a referendum is a very blunt instrument which needs to be handled with great care,” he said on BBC radio.

“ I think that membership of the EU is absolutely fundamental to British interests and therefore we should be very wary of putting our membership in the hands of a lottery in which you have no idea what factors, completely unrelated to Europe, will affect the outcome of that lottery and, therefore, affect the fundamental interests for Britain.” The Conservatives accused him of “a disgraceful lack of respect for the British people” on a day that peers are debating the Tory Bill to put a 2017 EU plebiscite into law. Tory peer Lord Dobbs — the author Michael Dobbs — said his remak was “very revealing”.

“He’s showing a total lack of respect for “the British people who won’t forgive Labour and the Liberal Democrats if yet again they try to prevent a referendum on Europe.”

Meanwhile European Commission vice-president Viviane Reding accused Mr Cameron of peddling a “myth” that the UK was being invaded by foreigners.

Hitting back at Lord Mandelson this morning, Tory peer Lord Dobbs - the author Michael Dobbs - said his remak was “very revealing”.

“He’s showing a total lack of respect for the British people who won’t forgive Labour and the Liberal Democrats if yet again they try to prevent a referendum on Europe.”